House sales down 13%; price up 8%

Auckland and Canterbury continue to dominate New Zealand's housing market, while Queenstown and Dunedin reflect the more fickle and muted regional trends.

Nationally, residential house sales for July slumped 13% on last year, while the national median price rose more than 8%, or $31,000, to $416,000 - underpinned by Auckland and Canterbury.

Otago largely mirrored the national trend. Its sales were down 20% on a year ago, from 240 homes to 190, and median price down 8.5%, from $266,778 last year to $244,000, Real Estate Institute of New Zealand (REINZ) data out yesterday showed.

While Queenstown notched up a 13.3% median price gain, from $525,000 to $595,000, its sales were also down 20%, from 49 to 39.

The wider Central Otago-Lakes region, which includes Queenstown, booked a 5.9% price decline, from $478,000 to $450,000, with this July's 91 sales the same number as in July last year.

Dunedin sales were down almost 20%, from 177 homes to 142, and the median price fell almost 4%, from $280,000 to $269,500.

REINZ Otago-Southland spokeswoman Liz Nidd said the market was ''still feeling grim''.

She noted Dunedin prices were only just above the previous 2007 high; banks were closely scrutinising structural, building and electrical risks; and vendors had high expectations of making gains.

''The banks are getting tighter and tighter on any perceived element of risk'' and many potential deals were failing to close, she said.

REINZ chief executive Helen O'Sullivan said the market was ''firmly in winter mode''. Listings were low and ''activity muted across the country''.

Seasonally, sales had picked up a little in July from June, but the imminent election was probably also influencing buyer behaviour, she said.

It was worth noting Auckland and Canterbury-Westland accounted for more than 100% of the increase in the national median price between July last year and July this year, which was ''a further indication that the national price is being driven by these two regions alone'', she said.

Reports on the effects of the Reserve Bank's loan-to-value ratio (LVR) restrictions on banks continue, particularly from the regions, where a lack of buyers is reportedly filtering up the tiers of housing price bands.

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